Performance of Mutual Funds Case Study of Sbi & Hdfc Bank
Performance of Mutual Funds
Case study of SBI & HDFC Bank
Mrs.Gazal Aggarwal**
Mrs Meenu Kaur*
Introduction
The last three decades of 20th Century witnessed the emergence of a number of issues that spared debates and discussion among economist. Financial sector is the major area of macro economy that has received renewed focus in recent years; the banking sector has been the cynosure of academia. The traditional face of banking is also undergoing a change from that of a mere intermediator to the one of a provider of a quick, cost effective, efficient & consumer centric services.
The Indian banking system progressed by leaps and bounds after nationalization. Banking in India recorded an unparallel achievement in spreading banking to rural and semi urban area. But in spite of this achievement the banking sector performed poorly as regards their productivity and efficiency. Verma committee has cited non or marginal growth of income from non fund activities as one of the reason for weaknesses of these banks. The main motive of banks is to maintain solvency, profitability and liquidity. Under solvency have to maintain its liabilities and assets and on the other hand liquidity is necessary for public confidence. But liquidity and profitability cannot go together i.e. if banks are going to maintain its liquidity then its not possible for them to achieve profitability. For profitability banks should invest its fund in such a way that it earns maximum income.
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** Lecturer in Management at Balraj Singla group of institute, Patiala.
* Lecturer in Management at Balraj Singla group of institute, Patiala.
So that Verma Committee suggested that banks would have to minimize their risk and for this, banks should not depend only upon conventional sources of income rather they try to shift towards non traditional sources or off balance sheet activities. Non traditional or off
Case study of SBI & HDFC Bank
Mrs.Gazal Aggarwal**
Mrs Meenu Kaur*
Introduction
The last three decades of 20th Century witnessed the emergence of a number of issues that spared debates and discussion among economist. Financial sector is the major area of macro economy that has received renewed focus in recent years; the banking sector has been the cynosure of academia. The traditional face of banking is also undergoing a change from that of a mere intermediator to the one of a provider of a quick, cost effective, efficient & consumer centric services.
The Indian banking system progressed by leaps and bounds after nationalization. Banking in India recorded an unparallel achievement in spreading banking to rural and semi urban area. But in spite of this achievement the banking sector performed poorly as regards their productivity and efficiency. Verma committee has cited non or marginal growth of income from non fund activities as one of the reason for weaknesses of these banks. The main motive of banks is to maintain solvency, profitability and liquidity. Under solvency have to maintain its liabilities and assets and on the other hand liquidity is necessary for public confidence. But liquidity and profitability cannot go together i.e. if banks are going to maintain its liquidity then its not possible for them to achieve profitability. For profitability banks should invest its fund in such a way that it earns maximum income.
____________________________________________________________
__________________
** Lecturer in Management at Balraj Singla group of institute, Patiala.
* Lecturer in Management at Balraj Singla group of institute, Patiala.
So that Verma Committee suggested that banks would have to minimize their risk and for this, banks should not depend only upon conventional sources of income rather they try to shift towards non traditional sources or off balance sheet activities. Non traditional or off
Bibliography: Books Dutt Ruddar, Sundharam K.P.M (2004), Indian Economy, S Gupta, S. B. (1982), Monetary Economies – Institutions, Theory and Policy, S. Chand & Company, New Delhi. Paul R.R and S.L. Bhardwaj(1989), Money Banking and International trade, Kalyani Publications, New Delhi Tarapore S.S (2000), Issues in Financial Sector, UBSPD, New Delhi Papers Ghosh D.N.(1999), “ Verma Committee Report on Weak Public Sector Banks”, Economic and Political Weekly, Nov Nachane D.M. Ghosh Saibal(2002), “ Determinants of Off Balance Sheet activities- An Empirical Analysis”, Economic and Political Weekly, Feb-2-8, 2002, Vol II. Articles & Dissertation Aggarwal Gazal (2005), “Trends In Off- Balance Sheet Activities Of Public Sector Banks In India” M.Sc thesis submitted to Punjab School of Economics, Guru Nanak Dev University, Amritsar. Jalan B,(2000), “Agenda for Banking in the New Millennium”, Reserve Bank of India Bulletin,RBI Tarapore S.S (2000), “Twist and Turns in Banking Sector Reforms”, Business Standard, 15 Dec